(Bloomberg) – Luxshare Precision Industry Co. is acquiring Wistron Corp.’s iPhone production business in China through a $ 472 million deal, potentially becoming the first mainland company to win a coveted role in assembling the device. by Apple Inc. during U.S. trade tensions.
Taiwan-based Wistron, one of three contract manufacturers that assemble Apple iPhones, said on Friday that it agreed to sell two subsidiaries in eastern China for 3.3 billion yuan to Luxshare. One such unit, based in Kunshan City, is Wistron’s only iPhone manufacturing site, according to people familiar with the company’s business.
The deal is a victory for Luxshare, which produces accessories and components from cables and chargers to antennas, but is also the world’s largest maker of Apple AirPods, a lucrative business that helped the company become one of the top producers. of 2019 Asian stocks. Apple, in turn, has sought a Chinese mainland partner in part to expand local sources during a trade war.
A representative from Wistron said the Kunshan site that is sold to Luxshare makes smartphones, laptops and connected devices, and that the company will shift production of some of those products to other parts of China. He declined to comment on his iPhone business. An Apple representative did not immediately respond to an email request for comment.
Read more: Apple’s AirPods ignites one of the main actions of Asia in 2019
Luxshare and other contract manufacturers have always tried to compete in assembling Apple’s most profitable device. Wistron is the smallest of the three iPhone assemblers, lagging behind Pegatron Corp. and Hon Hai Precision Industry Co., the company also known as Foxconn. Wistron continues to assemble cheaper iPhones in India.
“With the acquisition of Wistron’s iPhone unit, Luxshare can now become an iPhone assembler,” said GF Securities analyst Jeff Pu. “This will first pose a threat to Pegatron’s iPhone business in China.”
The deal is slated to be completed before the end of the year with regulatory approval, Wistron said in an emailed statement.
Read more: iPhone makers look beyond China to rethink supply chain
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